Former hedge fund manager and Real Vision Group Raoul Pal has just voiced his prediction that the U.S. Dollar (USD) is going to “explode higher” when the Federal Reserve makes interest rates negative.
However, it doesn’t mean that he has changed his bullish stance on Bitcoin (BTC) and gold (XAU).
I know its not a popular view, but I don't see any way that the dollar doesn't explode higher and US rates don't go negative...I think they go hand in hand and it's coming soon..— Raoul Pal (@RaoulGMI) April 21, 2020
Yes, and Im still bullish bitcoin and gold. Also not mutually exclusive.
Expect a blow-off dollar
While Pal agrees that the U.S. dollar is dying by “death of thousands of cuts,” he foresees that a blow-off top is coming before the demise of greenbacks.
When global stocks and cryptocurrencies were violently crashing in mid-May, investors rushed to the U.S. dollar in search of safety. The demand was so high that banks were running out of banknotes.
On March 20, the dollar index (DXY), which stacks up the U.S. against six major fiat currencies, reached 102.98, its highest level since January 2017.
This came just four days after the Fed cut interest rates to nearly zero on March 16.
Cash is king, cash is dead
As reported by U.Today, Pal opined that the dollar, gold, and Bitcoin made “the most sense” for investors during the pandemic.
Mark Yusko of Morgan Creek Capital explained that cash is king during liquidity squeezes, but it would not manage to hold on to its throne for much longer.
This is why, in the long-term perspective, only Bitcoin and gold will save the day, according to Pal.